Business Posts

Startup Basics: Choosing a Business Name

Choosing a name for your new business is an important and often challenging part of the startup process. Some founders arrive at a name in the early stages, while others wait until their business plan has solidified. This blog post will outline some of the key considerations for deciding on a name, as well as how to protect the name you choose.

The best place to start when choosing a business name is with your mission statement, business plan, and unique value proposition. What is the essence of your business? What did you learn about your target audience in your market research and potential customer interviews? As you brainstorm, a keyword discovery tool like Twinword may help inspire ideas.

While it may be tempting to choose a name that includes or refers to your primary product or service, don’t limit yourself; your business’ name should still fit if you diversify your product mix or expand your focus to include additional target customer groups.

Once you’ve come up with a few contenders, review and analyze your options. Some things to consider include the following:

  • Does the name convey what your business does?
  • Is the name easy to remember?
  • Is the name easy to pronounce? This is especially important with the increasing popularity of voice assistants like Siri and Alexa.
  • Is the name easy to spell? Will potential customers be able to find you online or refer you to others?
  • Is the name consistent with your business tone and branding?
  • How will the name look in a variety of common mediums, such as a logo and email signature?

Before you settle on a name, make sure that it’s available. If it’s already in use or trademarked, it’s probably not a viable option. Check for trademarks via the U.S. Patent and Trademark Office’s Trademark Electronic Search System (TESS); states such as Illinois also have a searchable trademark database. It’s also important to check the name’s availability as a domain and a social media handle in order to avoid confusion for potential customers; sites like GoDaddy and Namechk can help you find available options.

Once you’ve found the perfect name for your business, it’s important to protect it. There are several different ways to register your business name, some of which may be legally required depending on your business structure and location.

  • Entity name. In Illinois, corporations and LLCs are required to be registered with the Secretary of State and/or licensed by the Illinois Department of Revenue.
  • Trademark. Trademarks prevent others in the same (or similar) industry in the U.S. from using your trademarked names. Register your federal trademark with the U.S. Patent and Trademark Office.
  • Doing Business As (DBA) name. In Illinois, when the operating business name is different from the owner’s or partners’ full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register the business name with the county clerk's office of the county where they reside.
  • Domain name. If you want your business to have an online presence, you’ll need to register a domain name (also known as a URL or website address) with a domain name registrar (such as GoDaddy). This protects your brand presence online. Your domain name does not have to be the same as your legal business name.

For more information about bookkeeping and accounting, as well as other aspects of business operations for new startups, visit our BizVids Tutorials or register for a NaperLaunch Academy workshop. NaperLaunch coaches and SCORE mentors are also available to provide one-on-one virtual assistance.

Posted: 
Monday, May 17, 2021 - 15:45

5 Best Practices for Prospective Customer Interviews

Previously on the blog, we’ve described the Lean Startup Process that is the foundation of the NaperLaunch Academy curriculum. A key component of this process is the Build-Measure-Feedback loop; as described by Eric Ries, it involves identifying a customer need and developing a solution, which becomes your product or service.

In order to identify the needs of your potential customers, you need to listen to them. Customer interviewing allows you to explore and learn what you don't know. Through the interview process, your goal is to Identify what you need to learn and create metrics against which to measure your results.

Why interviews and not focus groups or surveys? While customer interviews are about exploring what you don’t know you don’t know, surveys assume you know the right questions to ask—and even worse that you know the “right” answers to those questions. In addition, you can’t see the customer during the survey, whereas in a face-to-face interview you can gain additional insight from their body language and tone of voice. Focus groups usually devolve into “group think,” whereas one-on-one interviews will enable you to hear from a variety of individuals.

Below are 5 best practices for approaching customer interviews:

  1. Focus on learning. Build a framework around learning about the problems experienced by your target customer. This is not the time for pitching, explaining, or defending your idea.
  2. Don’t ask customers what they want. Measure what they do. Try to learn how people solve the problem currently. There may be good solutions already available. To create a better solution, it is necessary to understand current solutions. This also provides guidance on what people are willing to buy.
  3. Stick to a script. Ask the same questions to everyone so you can record the answer differences. Begin by asking broad questions, then become more specific as you proceed.
  4. Cast a wide net initially. When seeking interview prospects, start with people that you know to test your questions and approach. Then interview your target customers to learn how that audience thinks. You’ll also get a sense of how widespread the problem is.
  5. Document and review results. Immediately after the interview, transcribe responses while they are still fresh in your mind. As you interview more people, review the accumulated totals for each question to understand what you learned; you may need to revise some questions and conduct further interviews based on what you learned.

Customer interviewing is important throughout the Build-Measure-Feedback loop. Once you’ve analyzed the findings of your initial interviews and developed some draft solutions, circle back for a second conversation with your interview subjects to confirm that your idea solves their problem. Engaging in this cyclical process will inform the development of a low-cost proof of concept that you’ll use to establish people’s value proposition. (Our blog post on the minimum viable product describes this process in detail.)

Here are some titles available at Naperville Public Library that outline the lean startup and scale up process, including conducting prospective customer interviews. The concepts mentioned in this post are based on these books.

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The Lean Startup by Eric Ries

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The Startup Checklist: 25 Steps to a Scalable, High-Growth Business by David S. Rose

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Running Lean: Iterate from Plan A to a Plan That Works by Ash Maurya

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Scaling Lean: Mastering the Key Metrics for Startup Growth by Ash Maurya

For more on this and other topics, consider registering for the NaperLaunch Academy Workshop series. In addition, business librarians, NaperLaunch coaches, and SCORE mentors are available for one-to-one mentoring sessions.

Posted: 
Tuesday, May 4, 2021 - 10:15

Startup Basics: Cash Management

When starting a new business, it’s important to establish good cash management practices. A business doesn’t need to be generating revenue to open a bank account. In fact, it should be one of the first things a business owner does, even before they start selling products or services.

Opening bank and credit accounts on behalf of the business allow owners to keep business funds separate from personal funds. These accounts also allow business owners to easily keep track of expenses, manage employee pay, convey finances to investors, receive and deposit payments, and budget more accurately.

A business checking account should be used only for the business, never for personal expenses. It is also the account where payments from customers or clients are deposited; funds from this account are then used to pay for business expenses.

Like the business checking account, the business credit card should be used exclusively to pay business expenses. Credit card accounts can help a business make large startup purchases and help establish a credit history for the business. Many business accounts also come with a line of credit that can be used in the event of an emergency or for purchases such as equipment. Ideally, the gross revenue from the business’s sales will be used to pay off the credit card balance at or close to the beginning of each credit card billing cycle.

A business’s bank accounts form the foundation of its accounting system. The checking and credit card account statements can be used to prepare financial statements and tax returns.

While some business owners open a business account at the same bank they use for their personal accounts, rates, fees, and options may vary among banks. It’s a good idea to shop around and consider factors such as introductory offers, interest rates, and fees for transactions, early terminations, and minimum account balances.

Opening an account requires the following documents and information: the business’s federal Employer Identification Number (EIN), organization documents (eg, articles of incorporation or organization), and business license. Some banks may require additional documents. For more information about bookkeeping and accounting, as well as other aspects of business operations for new startups, visit our BizVids Tutorials or register for a NaperLaunch Academy workshop. NaperLaunch coaches and SCORE mentors are also available to provide one-on-one virtual assistance.

Posted: 
Monday, April 26, 2021 - 13:30